Analysts turn less bullish on XPeng and Chinese Tesla challengers as Covid, heatwave, power crisis undermine EV sales
- Consensus price targets for local industry bearers XPeng, Li Auto and Nio have been downgraded as old wounds undermine vehicle deliveries
- Concerns about Covid-19 lockdowns, heatwave and power shortages in China have eclipsed recent stock market gains
An MSCI index tracking EV-related stocks surged 36 per cent in May and June, aided by tax incentives to boost consumption and restore confidence in the economy. Since then, industry bearer XPeng has tanked 42 per cent, while Li Auto slumped by 23 per cent while Nio and the broader sector retreated by 10 per cent.
The three EV makers reported a 20 to 25 per cent slide in vehicle deliveries in July versus June. XPeng expects to deliver 29,000 to 31,000 EVs in the third quarter, about 40 per cent below Barclays’ forecast, while Li Auto also offered a downbeat assessment. Nio is due to report its earnings next month.
Jefferies slashed XPeng’s price target on August 25 to HK$73.70 from HK$85.10 also citing weak delivery guidance, while retaining its hold recommendation. The stock last traded at HK$73.85 in Hong Kong and US$18.92 in New York on Friday.